Lesson 6: Market Integration
The Rise of Global Corporation
Global corporations are inseparable to the
phenomenon of globalization.
The History of Global Corporations
 Colonialism and Imperialism.
 Post-World War II era where it was
dominated by American Corporations.
 The Re-entry of Japanese and European
Corporations back to world market.
 The contemporary global corporation is
simultaneously and commonly referred to
as multinational corporation or
transnational corporation.
 They are either an international company
or a global company
Types of Global Corporation
 International companies are importers and
exporters, typically without investment
outside of their home country.
 Multinational companies have investment
in other countries, but do not have
coordinated product offerings in each
country. They are more focused on
adapting their products and services to
each individual local market.
 Global companies have invested in and are
present in many countries. They typically
market their products and services to each
individual local market.
 Transnational companies are more
complex organizations which have
invested in foreign operations, have a
central corporate facility but give decision
making, research and development, and
marketing powers to each individual
foreign market.
 TNC – Transnational Corporation. An
enterprise that engages in activities which
add value (manufacturing, extracting,
services, marketing) in more than one
country (UNCTC).
 Foreign Direct Investment (FDI) is
construed to be one of the major elements
of the global economic development.
What Constitute the Essence of the Present-Day
Global Corporations?
 The advent and impact of digitalization
and instantaneous global communications.
 The structural transformation of global
commerce from producer driven
community to chains to buyer driven.
 The increasing role performed through the
global system by financial elements and
the emergence of global financial firm.
BRICS Economies (Brazil, India, China)
 Have become the most dynamic sector of
global corporate growth.
 Represented in part by their significant
FDI over the past three decades.
 The importance of global corporations in
Brazil, India, and China to the current and
projected global economy is singular
 With forty percent of the world
population, BRICS economies represent a
primary force in both global production
and consumption.
 The BRICS were unaffected by the US
and European Markets in 2007.
Challenge Introduce by BRICS to its
Competitors
 In relation to China, some globalist views
it as having connection with the old
socialist order since many of China’s
global corporation are owned and
controlled by the state. They are, in a way
financed by the state, and are also, in a
way, “endorsed” by the state to its ready
buyers.
 The BRICS economies is the new face of
the global corporate reality with their
strong domestic markets and their ability
to gain capital from within their host
countries.
NEMS
 NEMS – Non-equity modes of production.
 Have become an increasingly important
form of global corporation within the
emerging economies.
 Represent an increasingly vast network of
relationships in which global production
chains are assembled through
– contract manufacturing,
– services outsourcing,
– contract farming,
– franchising,
– licensing, and
– management contracts.
Note: Externalization for the corporation which
gain access to benefits within global value chains
without investing large amounts of capital.
The Relevance of the Changing Regulatory
Environment to the Structure and Operation of
Global Corporations
 Lessened regulation by governments.
 The requirement of the so called corporate
social responsibility.
 Check and balances provided by NGOs.
 Need for regulation of the global financial
market.
The Normative Case: Global Corporations
 After World War II, global corporations
were viewed as agents of desired
economic development.
 FDIs were in demand throughout the
world.
 By the end of the 1960’s onward, global
corporations were viewed as gaining their
economic prominence through a variety of
socially destructive means.
 Global corporations are viewed as agents
of a system that on balance was resulting
from
– greater global wealth inequality,
– income inequality,
– lack of effective worker
protection, environmental
degradation,
– producing natural cultures of
corruption through corporate
collusion,
– and in some instances, threatened
national sovereignty.
 Global corporations are now very
powerful that they can create a financial
crisis if they want to.
Basic Features Thought to be Brought About by
Global Corporations
 Global inequality.
 The systematic stability and viability of
the global financial system.
 It has positive and negative contributions
to the contemporary world.
Lesson 7: ASEAN
Association of South East Asian Nations
 August 8, 1967 in Bangkok, Thailand.
 ASEAN Declaration or the Bangkok
Declaration was signed by the 5 founding
fathers of the regional organization:
INDONESIA, MALAYSIA,
PHILIPPINES, SINGAPORE, AND
THAILAND.
 ASEAN replaced the Association of South
East Asia (ASA), which was formed in
1961 by the Philippines, Thailand, and
Malaysia.
 The organization was formed with the
ongoing Vietnam War in its backdrop, and
the fall of Vietnam, Laos and Cambodia to
communist regimes.
The Five Foreign Ministers who signed the
Bangkok Declaration:
 Philippine Foreign Affairs Secretary
Narciso Ramos
 Indonesian Foreign Minister Adam Malik
 Thai Foreign Minister Thanat Khoman
 Malaysian Deputy Prime Minister Tun
Abdul Razak
 Singaporean Foreign Minister S.
Rajaratnam
ASEAN
 Thailand (1967)
 Indonesia (1967)
 Singapore (1967)
 Philippines (1967)
 Malaysia (1967)
 Brunei (1984)
 Vietnam (1995)
 Laos (1997)
 Myanmar (1997)
 Cambodia (1997)
The Secretariat of ASEAN at Jalan
Sisingamangaraja No.70A, South Jakarta,
Indonesia.
General Information
 Secretariat – Jakarta, Indonesia
 Working Language – English
 Membership – 10 states, 2 observers
 Chairman – Rodrigo Duterte (Philippines)
 Secretary General – Le Luong Minh
(Vietnam)
 Area – 1,712,602 sq. mi.
 Population – 625 million
 GDP – US$ 7.6 trillion
 GDP per capita – US$ 12,160
 Nominal GDP – US$ 2.8 trillion
 Nominal GDP per capita – US$ 4,160
 Time Zone – UTC+6:30 to +9
ASEAN Declaration
 To accelerate economic growth, social
progress, and cultural development
 To promote regional peace and stability
 To assist each other in training and
research
 To promote collaboration and mutual
assistance
  To collaborate for better utilization of – Education
agriculture and industry to raise the living – Environment
standards of all – Haze
 To maintain close, beneficial cooperation – Health
 Intergovernmental cooperation – Information
 Facilitates economic, political, military, – Labour
educational, and cultural integration – Rural Development & Poverty
 Mushawarah mufakat (consensus Eradication
deliberation) – Science & Technology
– Agree to agree – Social Welfare & Development
– Women
– Agree not to agree
– Youth
– Agree to postpone an agreement
ASEAN POLITICAL-SECURITY
THE ASEAN WAY
COMMUNITY
 Consensus
 What is ASEAN Political-Security
 Consultation Community?
 Non-interference Solving Transnational Crime
Additional Countries Blueprint 2025 of ASEAN Political-Security
 1997 Community
 Further regional integration  ASEAN Defense
 China  Strengthen democracy, good governance,
 South Korea the rule of law
 Japan  Promotion and protection of human rights
3 Pillars of ASEAN ASEAN Political Leaders
 ASEAN Political-Security Community  Pres. Rodrigo Roa Duterte (Philippines)
(APSC)
– ASEAN Ministerial Meeting PM- Prime Minister
(ANN)  Sultan Hassanal Bolkiah (Brunei)
– ASEAN Regional Forum (ARF)
– Defence FM- Foreign Minister
– Law  Pres. Joko Widodo (Indonesia)
– Transnational Crime  PM Najib Razak (Malaysia)
 ASEAN Economic Community (AEC)  Pres. Bounnhang Vorachith (Laos)
– ASEAN Economic Ministers  PM Prayut Chan-o-cha (Thailand)
(AEM)  PM Hun Sen (Cambodia)
– ASEAN Free Trade Area  Pres. Tran Dai Quang (Vietnam)
(AFTA)  FM Aung San Suu Kyi (Myanmar)
– Energy  PM Lee Hsien Loong (Singapore)
– Food, Agriculture & Forestry
– Finance
– Investment
– Minerals
– Mekong Basin Development
Cooperation
– Transportation
– Telecommunication & IT
– Tourism
– Sectoral Bodies under the
Purview of ASEAN Economic
Ministers
 ASEAN Socio-Cultural Community
(ASCC)
– Culture & Arts
– Disaster
– Management
ASEAN Economic
Community
ASEAN Economic Community
 Human resources development
 Recognition of professional qualifications
 Closer consultation on macroeconomic
and financial policies
 Trade and financing measures
 Enhanced infrastructure and
communications connectivity
 Development of electronic transactions
through e-ASEAN
 Integrating industries across the region to
promote regional sourcing
 Enhancing private sector involvement
BIMP-EAGA (Brunei Darussalam Indonesia
Malaysia Philippines – East ASEAN Growth
Area)
To increase trade, tourism, and investments by:
 Facilitating the free movement of people,
goods and services
 Making the best use of common
infrastructure and natural resources
 Taking the fullest advantage of economic
complementation
BIMP-EAGA
 Agro-industry
 Fisheries
 Tourism
 Transport and shipping
 Energy
ASEAN Socio-Cultural Community
People-centered and socially responsible with a
view to achieving enduring solidarity and unity
among the nations and people of ASEAN by
forging a common identity and building a caring
and sharing society which is inclusive and
harmonious where the well-being, livelihood, and
welfare of the people are enhanced.
 Human development
 Social welfare and protection
 Social justice and rights
 Ensuring environmental sustainability
 Building the ASEAN identity
 Narrowing the development gap
Contemporary Issues of ASEAN
 Rohingya
– stateless Indo-Aryan people from
Rakhine, Myanmar.
– There were an estimated 1
million Rohingya living in
Myanmar before the 2016–17
crisis.
– Described by the United Nations
in 2013 as one of the most
persecuted minorities in the
world.
– They are denied citizenship under
the 1982 Myanmar nationality
law.
Contemporary Issues of ASEAN
 ASEAN single currency
 Income inequality
 Trade imbalance
 Spratly islands
 Brunei: Part of Brunei's Exclusive
Economic Zone
 People's Republic of China: Part of Sansha
city, Hainan
 Malaysia: Part of Sabah state
 Philippines: Part of Kalayaan, Palawan
province
 Republic of China (Taiwan): Part of
Kaohsiung municipality
 Vietnam: Part of Trường Sa, Khánh Hòa
Province